KTM’s troubled period looks to be over following an announcement that Indian manufacturer Bajaj has become the main investor in the beleaguered brand.
Bajaj is one of India’s biggest motorcycle manufacturers and, by virtue of the sheer scale of its home market, one of the outright biggest bike makers in the world. Its growth started in the 1960s, when it was awarded a licence to build Vespa scooters for the Indian market.
The Pune-based company started building motorcycles in 1986 and even though we can’t buy Bajaj branded bikes on the British Isles, they really are a big deal in the global motorcycle market. Last year they sold a staggering 3.7 million bikes. To put that into context, Triumph sold just under 135,000 bikes in the same period and Ducati sold less than 60,000 units, while KTM peaked at 372,511 bikes (many of which were off-road competition machines) in 2023.
Many of those KTMs and Triumphs actually came out of the Bajaj factory, as the Indian company partners the European brands and assembles their smaller capacity machines, like the KTM RC 390 and Triumph Speed 400, in India. Bajaj has even been a passive investor in KTM since 2007.
Now Bajaj has stepped up and is investing in the debt laden Austrian company, which entered voluntary administration last November as it suffered liquidity problems as a result of dramatically reduced sales. It is investing €800 million as part of debt package and has a call option to become the majority shareholder, as a result, will take a controlling interest in KTM.
It will be interesting to see how Bajaj’s input will change KTM, which has established itself as the maker of extreme motorcycles and has proudly boasted of its racing successes through its ‘Ready to Race’ tagline. It’s an aggressive strategy which has worked well in the off-road world, where the high profile world titles have been reflected with market leading sales to hobbyists in the enduro and motocross world, but despite big budget programmes in Grand Prix road racing, street bike sales have largely been underwhelming.
Bajaj’s input will undoubtedly change KTM’s philosophy and it will be interesting to see what direction the business now takes. Will the new owners create new models that are more mainstream, more diverse and less extreme than current offerings? And will the MotoGP programme remain?
Previous owner Stefan Pierer appeared to bask in the prestige of racing and, after enjoying success in Moto3, the RC16 MotoGP racer has been reasonably competitive in the hands of riders like Brad Binder and Pedro Acosta. Ducati, a real minnow compared to KTM and Bajaj in terms of bike sales, has shown that Europeans can take on and beat the Japanese companies in racing – but will the new owners see value in a project which Pierer once told press required a budget of €70 million per year to be successful?
KTM’s brash and seemingly self-indulgent business model under Pierer would appear to be at complete odds with Bajaj’s typically Indian approach to manufacturing. They are focused on high volumes and cost efficiency, and we will likely soon see if they plan to remain in MotoGP, where there are marketing and R&D benefits to be gained for the high investment, or if the new management make their mark with a series of cost cutting exercises.
KTM CEO Gottfried Neumeister confirmed that the existing Austrian production facilities would remain in operation, commenting: “We have been given the opportunity to continue the history of KTM. Together with our long-standing partner Bajaj, we were able to work out a strategy that will enable us to raise a further €600 million for our new start in addition to the €200 million already made available.
The existing sites - in particular our main plant in Mattighofen/Munderfing - will remain the basis for our future success. This means that we will continue to be an important employer for the entire region. In view of this new, second opportunity, we at KTM feel deep gratitude and humility towards all those within and outside our group of companies who have made it possible. I would also like to take this opportunity to thank Stefan Pierer on behalf of all those who have accompanied us along the way. He laid the foundation for one of the world's best-known motorcycle brands, which has a unique community."
KTM’s MotoGP racers sported Bajaj branding for the first time at last weekend’s British Grand Prix, held at Silverstone, although as KTM enters the next chapter of its history, there are still a number of issues for Bajaj to address. The dwindling dealer network has a large amount of unsold stock to move on, while issues surrounding camshaft failures on the LC8c engined models continue to cause costly warranty claims.
KTM stands for Kronreif & Trunkenpolz Mattighofen, Mattifhofen being the Austrian town where engineer Hans Trunkenpolz and business partner Ernst Kronreif started building motorcycles in the early 1950s. The company manufactured small capacity motorbikes and scooters, and enjoyed some racing success locally and abroad. Erich Trunkenpolz, Hans’ son, took over the business in 1962 – the founders having passed away – and he remained at the helm until his death in 1989.
The 1980s hadn’t been kind to KTM and the business was in crisis when Pierer took charge in the early 1990s. Under his charge, KTM adopted its distinctive orange livery and became the major players in the off road world, usually working in collaboration with fellow Austrians Red Bull, the energy drink brand. He introduced the first KTM Duke street bikes in 1994 and oversaw a period of rapid growth that saw KTM become Europe’s biggest motorcycle brand.
Alas, changes in the market saw demand fall and the Pierer era is now coming to an ignominious end. The company’s woes won’t be fixed overnight, but it will be interesting to see what KTM emerges after the new owners have made a root and branch review of their acquisition, and set their vision for the future of this currently quirky and distinctive brand.
